Nik Abdul Rahim Nik Abdul Ghani

Beneficial ownership in sukuk ijarah: a shari’ah appraisal

Purpose The purpose of this paper is to critically study the application of beneficial ownership in sukuk ijarah by analysing the fiqh interpretation on the concept of beneficial ownership. Design/methodology/approach This is a theoretical paper using content analysis approach that delves into the works of Islamic scholars on the concept of ownership and evaluates the concept of beneficial ownership in sukuk ijarah from the Islamic perspective. Findings The paper concludes that the beneficial ownership should be considered as true ownership because Shari’ah has allowed the transfer of ownership by a sole basis of contract (offer and acceptance). Although the sukuk holders are not registered as the legal owners in the Land Office, the documentations and agreements have clearly specified the owners and their liabilities. Research limitations/implications Empirical investigations into how sukuk holders are responsible for the underlying assets in sukuk ijarah. Practical implications It is therefore important to develop parameters for beneficial ownership to govern the use of the concept in Islamic finance. Originality/value The paper shows the fiqh interpretation on the beneficial ownership in sukuk ijarah while considering all the constraints and challenges in the implementation of sukuk.

Tawarruq time deposit with wakalah principle: an option that triggers new issues

The development of Islamic banking system in offering the products which is based on the shariah principles has witnessed a tremendous success. There are many new products being introduced as alternatives to conventional ones. Yet, at the same time, some of these products remain hotly debated amongst jurists on their validity and subsequently become non-compliant products. One of such products that have been introduced is tawarruq-based deposit product. In addition, the newly introduced Islamic Financial Services Act 2013 states that deposit products which are characterized as principal guaranteed feature could not be offered based on mudarabah or wakalah as they are only appropriate for investment products (principal non-guaranteed products). Therefore, the introduction of tawarruq-based deposit product by Islamic banks could be the best alternative to take place. However, the wakalah principle is also embedded in this twarruq deposits. Hence, this paper makes an attempt to analyze the adoption of wakalah in the tawarruq deposit that may trigger new issue.